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2008 DIGILAW 37 (CHH)

UNITED INDIA INSURANCE CO. LTD. v. BODALI BAI

2008-02-19

DILIP RAOSAHEB DESHMUKH

body2008
JUDGMENT : Dilip Raosaheb Deshmukh, J.—Two appeals M.A. (C) Nos. 1243 and 1244 of 2007 by insurance company and two cross-objections for enhancement of compensation by the claimants filed therein and two appeals filed by the owner, M.A. (C) Nos. 1292 and 1271 of 2007, arising out of Claim Case Nos. 10 and 14 of 2007 are being disposed of by this common order. 2. Admittedly, South Eastern Coalfields Ltd. (for short 'the S.E.C.L.') was, on the date of accident, i.e., 21.10.2005, owner of the truck No. CG 16-A 0651, a goods carriage (hereinafter referred to as 'the truck'). It had permitted the truck to be used for taking the dead body of the father of one of its employees, i.e., Shyam Bihari for cremation. The truck was being driven by the respondent Shankar Das (henceforth 'the driver'). After cremation, on return Ranjan Kumar Sahu, aged 22 years and Sanjay, aged 23 years were being carried in the truck by the driver. The truck dashed against the bridge and turned turtle. Both Ranjan Kumar Sahu and Sanjay died. Claim Case Nos. 14 and 10 of 2000 were filed by the parents of both deceased respectively for compensation before Second Additional Motor Accidents Claims Tribunal (FTC), Manendragarh, Korba (herein after referred to as 'the M.A.C.T.'). 3. In both cases, the M.A.C.T. assessed compensation by taking the notional yearly income of the deceased at Rs. 15,000 and deducting 1/3rd therefrom towards personal expenses of the deceased and adopting a multiplier 17. Break-up of the compensation awarded by the M.A.C.T. in each case is as under: In Claim Case Nos. 14 and 10 of 2007: A Towards loss of dependency Rs. 1,70,000 B Towards loss of love and affection and also funeral expenses Rs. 12,500 C Towards loss to estate Rs. 2,500 Total Rs. 1,85,000 4. The M.A.C.T. held that the insurance company was not liable to pay compensation in view of the breach of the policy condition that gratuitous passengers were being carried in goods vehicle. It, however, fastened the liability on the owner, i.e., S.E.C.L., its Depot Officer, driver Shankar Das and the insurance company jointly and severally to pay the compensation. It directed that the insurance company would pay the compensation and recover it from S.E.C.L., its Depot Officer and the driver. It further directed that the S.E.C.L. could, if it so desired, pay the compensation first to the claimants. It directed that the insurance company would pay the compensation and recover it from S.E.C.L., its Depot Officer and the driver. It further directed that the S.E.C.L. could, if it so desired, pay the compensation first to the claimants. Interest at the rate of 9 per cent per annum was awarded on the amount of compensation provided the compensation was deposited within a period of 30 days from the date of award, failing which, interest at the rate of 12 per cent per annum was to be paid from the date of the award till realization of the amount of compensation. 5. Mr. Vivek Ranjan Tiwari and Mr. Praveen Das, learned Counsel appearing for the owner, i.e., the S.E.C.L. did not dispute that the insurance company was neither under any statutory liability nor under any contractual liability to cover the risk of gratuitous passengers, who died in the accident and were being carried in the truck, a goods vehicle. 6. The main thrust of the arguments of the learned Counsel for the owner, i.e., the S.E.C.L. is that there was no wilful infringement of the policy condition by the owner. The S.E.C.L. sanctioned the use of the truck only for carrying the dead body of the father of Shyam Bihari and was, therefore, in the aforesaid circumstances not under any vicarious liability to pay compensation. The order of recovery of compensation by the appellant insurer from the owner was, therefore, bad in law. Reliance was placed on United India Insurance Co. Ltd. Vs. Surinder and Others, and Premkumari and Others Vs. Prahlad Dev and Others, . 7. Mr. Goutam Khetrapal and Mr. Sou-rabh Sharma, learned Counsel appearing for the claimants in M.A. (C) Nos. 1243 and 1244 of 2007 argued that M.A.C.T. has jurisdiction to order the insurance company to pay compensation first and to recover the same from the owner. Reliance was placed on Sunita Jain v. Kunwar Singh 2007 (2) MPHT 417 ; National Insurance Co. Ltd. Vs. Baljit Kaur and Others, ; New India Assurance Co. Ltd. Vs. Asha Rani and Others, ; New India Assurance Co., Shimla Vs. Kamla and Others etc. etc., . The learned Counsel argued that the owner, i.e., the S.E.C.L. was under vicarious liability to pay compensation for the acts of its driver. Ltd. Vs. Baljit Kaur and Others, ; New India Assurance Co. Ltd. Vs. Asha Rani and Others, ; New India Assurance Co., Shimla Vs. Kamla and Others etc. etc., . The learned Counsel argued that the owner, i.e., the S.E.C.L. was under vicarious liability to pay compensation for the acts of its driver. It was argued that the M.A.C.T. erred in assessing compensation on the basis of yearly notional income and ought to have assessed the monthly income of the deceased at Rs. 3,000. The amount awarded by the M.A.C.T. under conventional heads was not assailed. 8. Mr. Dashrath Gupta, learned Counsel for the insurance company urged that in view of the fact that passengers were being carried in a goods carriage, the insurance company was not under any liability, statutory or contractual, to pay compensation. It was further urged that the M.A.C.T. had no jurisdiction in the above situation to order the insurance company to pay the compensation first and recover it from the S.E.C.L. Reliance was placed on New India Assurance Company Ltd. Vs. Diwakar Rohankar and Others, ; National Insurance Co. Ltd. Vs. Bommithi Subbhayamma and Others, ; Oriental Insurance Co. Ltd. Vs. Smt. Raj Kumari and Others, and United India Insurance Co. Ltd. Vs. Anubai Gopichand Thakare and Others, . 9. Having heard the rival contentions, I have perused the record. Since it has not been disputed by the learned Counsel for the owner, i.e., the S.E.C.L., that the insurance company was not under any liability, statutory or contractual to cover the risk of gratuitous passenger being carried in the truck, a goods carriage, there is no need to dwell further on it. The only point that requires consideration is whether in such a situation the M.A.C.T. erred in ordering the insurance company to pay compensation first and to recover it from the owner? It is pertinent to note that the M.A.C.T. has held that the liability to pay compensation was joint and several on the insurance company, S.E.C.L. and the driver. It further directed that the S.E.C.L. may, if it so desired, pay the compensation and interest to the claimants instead of paying to the insurance company in recovery proceedings. It is true that in National Insurance Co. Ltd. Vs. Baljit Kaur and Others, ; New India Assurance Co. Ltd. Vs. Asha Rani and Others, ; New India Assurance Co., Shimla Vs. It is true that in National Insurance Co. Ltd. Vs. Baljit Kaur and Others, ; New India Assurance Co. Ltd. Vs. Asha Rani and Others, ; New India Assurance Co., Shimla Vs. Kamla and Others etc. etc., and National Insurance Co. Ltd. Vs. Kusum Rai and Others, , the Apex Court has in exercise of its extraordinary jurisdiction under Article 142 of the Constitution of India ordered the insurance company to pay compensation first and recover it from the owner. The decision of the Apex Court in National Insurance Co. Ltd. Vs. Bommithi Subbhayamma and Others, , also applies with full force to the case in hand, in which, it has been held that in such a case the insurance company is not liable to pay compensation first to the claimants and then to recover it from the owner. In National Insurance Co. Ltd. v. Bommithi Subbhayamma (supra), the Supreme Court referred to the following observation, in New India Assurance Co. Ltd. v. Asha Rani (supra), as under: The observations made in this connection by the court in New India Assurance Co. Ltd. Vs. Asha Rani and Others, , to which one of us, Sinha, J., was a party, however, bear repetition: (26) In view of the changes in the relevant provisions in the 1988 Act vis-a-vis the 1939 Act, we are of the opinion that the meaning of the words 'any person' must also be attributed having regard to the context in which they have been used, i.e., 'a third party'. Keeping in view the provisions of the 1988 Act, we are of the opinion that as the provisions thereof do not enjoin any statutory liability on the owner of a vehicle to get his vehicle insured for any passenger travelling in a goods vehicle, the insurers would not be liable therefor. In New India Assurance Co. Ltd. Vs. Asha Rani and Others, , it has been noticed that sub-clause (i) of Clause (b) of Sub-section (1) of Section 147 of the 1988 Act speaks of liability which may be incurred by the owner of a vehicle in respect of death of or bodily injury to any person or damage to any property of a third party caused by or arising out of the use of vehicle in a public place. Furthermore, an owner of a passenger-carrying vehicle must pay premium for covering the risks of the passengers travelling in the vehicle. The premium in view of the 1994 amendment would only cover a third party as also the owner of the goods or his authorised representative and not any passenger carried in a goods vehicle whether for hire or reward or otherwise. It is, therefore, manifest that in spite of the amendment of 1994, the effect of the provision contained in Section 147 with respect to persons other than the owner of the goods or his authorised representative remains the same. Although the owner of the goods or his authorised representative would now be covered by the policy of insurance in respect of a goods vehicle, it was not the intention of the legislature to provide for the liability of the insurer with respect to passengers, especially gratuitous passengers, who were neither contemplated at the time the contract of insurance was entered into, nor any premium was paid to the extent of the benefit of insurance to such category of people. 10. There is thus no provision under the Motor Vehicles Act which authorises the M.A.C.T. to order the insurance company to pay the compensation first to the claimants and to recover it from the owner after recording a finding that the insurance company was not under any liability, statutory or contractual, to pay compensation. In this view of the matter, M.A. (C) Nos. 1243 and 1244 of 2007 deserve to be allowed. 11. The arguments advanced by learned Counsel for the appellants in M.A. (C) Nos. 1292 and 1271 of 2007 also do not hold good. The mere fact that the S.E.C.L. had sanctioned the use of the truck only for carrying the dead body of the father of an employee would not absolve the S.E.C.L., from its vicarious liability for the act of its driver/employee of carrying of passengers in the truck while returning from the cremation. The principle of vicarious liability applies to the facts of the case at hand and the appellant owner, i.e., S.E.C.L. cannot escape its liability to pay compensation. M.A. (C) Nos. 1292 and 1271 of 2007 are, therefore, liable to be dismissed. 12. The principle of vicarious liability applies to the facts of the case at hand and the appellant owner, i.e., S.E.C.L. cannot escape its liability to pay compensation. M.A. (C) Nos. 1292 and 1271 of 2007 are, therefore, liable to be dismissed. 12. So far as the quantum of compensation is concerned, in Claim Case No. 14 of 2007, the claimants were the parents of deceased who were aged 42 years and 46 years. The average age comes to 44 and the multiplier applicable would be 15, according to Second Schedule. Similarly, in Claim Case No. 10 of 2007, claimants were the mother and brother of deceased who were aged 42 years and 18 years respectively. If the age of the mother is taken into consideration, then multiplier applicable would be 15 as per the Second Schedule whereas the M.A.C.T. has applied multiplier 17. It is thus clear that M.A.C.T. has already applied much higher multiplier in both cases while awarding compensation. So far as the personal income of the deceased is concerned, no reliable evidence was led by claimants before the M.A.C.T. Therefore, in my considered opinion, the M.A.C.T. was justified in assessing compensation on the basis of notional yearly income. In the facts and circumstances of the case at hand, the approach of the M.A.C.T. can, therefore, not be faulted. The compensation awarded already being on the higher side, the question of further enhancement does not arise. 13. In the result, M.A. (C) Nos. 1243 and 1244 of 2007 filed by appellant insurance company are allowed. The impugned award dated 31.7.2007 passed in both Claim Case Nos. 10 and 14 of 2007 are modified. Appellant insurance company is not under the liability to pay compensation and interest as awarded by the M.A.C.T. Liability to pay compensation with interest as awarded rests squarely with the S.E.C.L. and the driver. Compensation deposited by the appellant insurance company under order dated 2.11.2007 passed by this Court shall be refunded to it by the M.A.C.T. Cross-objections filed by the claimants in M.A. (C) Nos. 1243 and 1244 of 2007 are rejected. M.A. (C) Nos. 1292 and 1271 of 2007 filed by the owner, i.e., S.E.C.L. are dismissed.